After trying repeatedly to buy a bigger plant to replace three smaller ones, the owners of Select Tool Inc. gave up. They decided to invest in new space for a burgeoning staff of 107 quality control manufacturing specialists.

“We were splitting at the seams and we just couldn’t accommodate our growth anymore,” says Trish Prince, controller of the 18-year-old company. “We’d been looking for a new place for at least two years. But we couldn’t find anything that was big enough.”

Thanks to the world-beating quality of its work, Windsor and Essex County’s $1-billion-a-year automotive machine, the tool, die and mould-making sector is rocking with good news these days.

Only four years ago Windsor and its industrial suburbs were dotted with the empty hulks of nearly 100 bankrupt or closed MTDM companies. The For Sale signs are nearly all gone now, the empty plants nearly all occupied, mostly humming again.

On Thursday morning, just down the block from Select Tool’s current plant in Oldcastle, Integrity Tool & Mold Inc. will be awarded a coveted Supplier of the Year award by Chrysler, one of its biggest customers.

In a sign of how supplier-Big Three relations have changed since the bankruptcies in 2008, Chrysler executives from Auburn Hills, Mich., were to deliver Integrity’s award personally to the 315 employees of the Canadian plant.

It’s an important, high-value, high-tech industry, and Windsor and Essex County’s tooling industry dominates the field in North America and is known worldwide.

So the Chrysler award is a big, big deal for Integrity, says Scott Allen, general manager of the company. “It puts us in a category as one of (Chrysler’s) preferred sources. We’re the leader in the industry and we’re proud of that.”

The award almost guarantees more work going forward for years, so long as Integrity “doesn’t take its eye off the ball,” Allen says. “It’s a dynamic industry. You have to be vigilant. You have to bring your ‘A’ game all the time.”

Integrity also employs 62 people in a satellite plant in Pulaski, Tenn., and 35 in a third location in Queretaro, Mexico. Last year it was ranked the No. 2 die and mould company in North America with $81.5 million in sales.

The tooling industry’s good news is being shared by nearly everyone in the local sector right now, says Craig Wiggins of Tooling & Equipment Capital Solutions Inc., local financiers to the industry.

“There’s some good stuff in the pipeline” in the form of a 30-per-cent increase in the number of new vehicle launches coming from Detroit and the rest of the world’s manufacturers, Wiggins says.

But it takes years for a new vehicle to transition from the design studio to the plant floor. So most of the work being awarded is for 2017 model year vehicles the public won’t be able to purchase until 2016.

Ford’s groundbreaking aluminum F-150 pickup truck in particular is going to be worth well over $1 billion in new tooling contracts, as are a new Odyssey minivan from Honda, a new Honda Pilot and an Acura sedan.

Hundreds of new contracts from those vehicle launches and others are being awarded monthly these days which continues to fuel labour demand in an industry that was nearly wiped out during the Detroit bankruptcies.

There were celebrations in many plants this week as Chrysler began handing out more than $1 billion worth of tooling contracts for the 2016 model year Chrysler minivan. There are approximately 3,000 parts in a modern vehicle, and every one of them means a tooling contract.

Omega Tool Corp., also based in Oldcastle and also one of the top five in North America, was believed to have won major work for Chrysler’s RU program, the minivan.

“We got quite a bit” of the Chrysler work, said Price at Select Tool. The company is a crucial but lower-tier supplier that doesn’t deal directly with Chrysler. It provides gauges, fixtures and automation devices to the firms that build its tools and moulds.

Integrity was one of an estimated half-dozen companies that picked up major Chrysler contracts this week. “We received some of that – fascia components,” Allen confirmed. The front end of every new vehicle is worth millions in tooling contracts for the plastic bumper cover, grille, headlamp surrounds and other parts.

But like most of the big toolers, Integrity has carefully diversified to protect itself from another big industry crackup. It’s also a major supplier to Nissan, Hyundai/Mobius, General Motors and most of the other OEMs. “We deal with all the majors.”

And that’s the other secret of an industry so little known in its own town: the hometown assembler isn’t the biggest customer — not by a long shot.

“You’d expect there would be more,” Wiggins said, given the city’s proximity to the plant and Auburn Hills. “But we’ve got a ton of Honda work locally. I see a lot of Honda work on the plant floors. Nissan is really good for Windsor because they’ve been expanding like crazy.

]]>http://blogs.windsorstar.com/opinion/tooling-industry-rocking/feed0Scott Allen, general manager with Integrity Tool and Mold Inc. at Automotive Parts Manufacturers' Assoc. exhibit floor June 7, 2012. NICK BRANCACCIO/The Windsor Star)winstarvanderdoelen“Re-shoring” Work From Chinahttp://blogs.windsorstar.com/opinion/re-shoring-work-from-china
http://blogs.windsorstar.com/opinion/re-shoring-work-from-china#commentsWed, 21 Nov 2012 23:02:22 +0000http://blogs.windsorstar.com/?p=87189]]>Ever heard of “re-shoring?” Get used to the word — it describes the repatriation of jobs from overseas back to North America.

It’s happening in Windsor and Essex County right now as dozens of local tooling and mould shops benefit from the re-shoring – also called “on-shoring” or “back-shoring” – of work sent to China during the automotive industry’s boom years.

Nobody knows for sure how many jobs have been brought back home to the machine, tool, die and mould industries of Ontario and Michigan, which employ about 38,000 people between them. But it’s a significant number, a Windsor conference sponsored by Export Development Canada heard Tuesday.

The work is coming back because automakers can no longer afford to wait an extra two months or more to have dies and moulds produced in China for savings of only 15 per cent. Until recently, a steel shortage was even stretching that delay to as much as half a year.

The OEMs — Original Equipment Manufacturers, as automakers call themselves — started offshoring much of their mouldmaking and die work a decade ago when they could save up to 33 per cent by having tools made in Asia or Eastern Europe.

Not only did they export thousands of Canadian and American jobs with the work, they forced Windsor-area suppliers to teach the Chinese the right way to make moulds for Detroit.

“Basically, you were being asked to train your competitors in how to do your work,” says Jay Baron, president and CEO of the Centre for Automotive Research in Ann Arbor.

But that’s all changed under the new economic reality, Baron told an audience of about 150 local executives at the EDC’s annual tooling conference. The former research scientist, engineering professor and Volkswagen quality executive was the keynote speaker Tuesday.

“What’s driving our industry right now is lead time,” Baron told local toolers. “Price is actually secondary, although that could be a short term trend.”

Prices are now nearly identical worldwide. And OEMs no longer compete based on quality because American and Canadian vehicle quality is now equal to German and Japanese standards.

What’s left? “Lead time,” or who’s the fastest in delivering the next new product to market. And the biggest lag in lead time is making the tools, dies and moulds for the largest of the 30,000 parts that make up an average vehicle.

Dave Cecchin, president and CEO of Omega Tool Corporation in Oldcastle, ranked seventh largest MTDM company in North America, said his company’s employees are among those who have benefited from shortened lead times and re-shoring.

“We still outsource to the U.S. and China, in the lower tens of millions per year,” Cecchin said after Baron’s speech. “But it’s half of what we used to do in 2005, 2006.

“We don’t have that pressure (from the OEMs) any more. It’s our decision now what we offshore, and we like to be loyal to Canada,” Cecchin said. “We just outsource components for the larger moulds.”

In another industry development tied to re-shoring, a severe ordering backlog on steel blanks for dies and moulds has eased, Cecchin said.

Automotive dies for body panels and moulds for plastic parts are carved from massive, solid steel ingots. A blank for a pickup truck bumper can weigh 15 tons.

Poured and quenched by specialty foundries in Quebec and the U.S., the largest of them cost $60,000 to $100,000 each — and the wait list had been as long as 18 weeks.

That recently eased to six to eight weeks, Cecchin said. But the wait has “helped out with the re-shoring,” forcing OEMs to source more work closer to home and closer to launch deadlines.

Outsourcing adds four weeks on the water for shipping; one to two weeks in customs clearance; plus another one to two weeks for final modifications. Total delay: up to two months wasted on a new vehicle launch.

But no one will be able to stay in the business purely on low price or hustle, Baron said. North American MTDM companies will keep winning work back from China only so long as their engineering skills remain superior — which they still are, despite improved quality among Chinese producers and massive industrial subsidies.

“They clearly have some kind of support from government when you see all the wonderful equipment they have and all the people they have walking around in their shops,” Baron told the mouldmakers

Baron said the biggest news in their mouldmaking world is the sudden explosion in demand for aluminum parts and the dies and moulds to make them, as OEMs chase weight savings to meet stringent fuel efficiency laws.

Half the new tooling work now being done in Michigan shops is now for aluminum parts, Baron said.

Aluminum hoods have been common for years. Next year will see the introduction of the first aluminum doors on a vehicle, likely on one of the new full size pickup trucks out of Detroit.

“I can’t tell you which one,” Baron said. “I don’t know why the industry is so hush hush about it, but they are.”

One industry is dominating the Saturday jobs pages again in a way not seen since the North American auto sector went into its death rattle four years ago.

If you have the skills, once again employers are fighting for people to fill the dozens and dozens of jobs going begging in the MTDM sector – the machine, tool, die and mould-making industries.

The mould business is booming again, as predicted in this space 10 months ago by local industry expert Craig Wiggins of Tecumseh. His T & E Capital Solutions Inc. finds financing for companies supplying dies and moulds to the automotive industry.

As Wiggins forecast last Christmas, a tidal wave of billions of dollars of investment in new vehicle lines is sweeping through the MTDM sector, and a huge chunk of the cash is being deposited in Windsor.

“Our top companies are up 40 per cent since 2008 – that’s staggering,” Wiggins said Friday. Annual growth rates were 18 per cent in 2011, 18 per cent more this year, and two more banner years are expected. “2013 and 2014 are shaping up to be very strong as well. We could have a four-year cycle that is unprecedented.”

In fact Windsor now OWNS the automotive mould business despite the strong Canadian dollar, Wiggins says, citing the latest list of industry leaders in trade publication Plastics News.

Of the $1.1 billion in business done by the top 25 companies in the industry, according to Plastics News, an estimated $371 million flowed through Windsor and environs this year.

“But the thing that got me is how the market share is shifting,” Wiggins says. “Not only have we bounced back since 2008 when the business went in the toilet, but Windsor has taken another five per cent from other North American firms.”

Windsor used to control about half of North America’s total investment in automotive tooling. After the terrible shakeout that followed the bankruptcies of Chrysler and General Motors, that grew to at least 55 per cent. In fact our share is probably even higher, Wiggins says, but not all of our local companies are “on the radar” of those doing the counting.

Plastics News’ latest ranking of the industry has Canadian companies holding down the number two, three and four slots, plus the seventh largest.

(So many of the world’s leading automotive mould-makers are located in Oldcastle that people in the industry now jokingly call the industrial suburb of Tecumseh “Mouldcastle.”)

Build-A-Mold is at 18th spot with $32 million in business this year, Reko International Group Inc. is tied for 18th with $32 million of its own, Unique Tool & Gauge is at 22nd with $25 million, and Windsor Mold is at 23rd with $22 million.

That’s eight of the top 23 spots. “And I know of two other companies in Windsor who should be on the list but aren’t there,” Wiggins said. The two other local biggies were either overlooked or chose not to report their sales for their own reasons.

The MTDM industry went into a death rattle of its own after the Detroit automotive bankruptcies, with as many as half the 200 local companies going out of business or consolidating. But the Canadian survivors still employ more than 8,000 people.

For all the bankruptcies on this side of the border, there were even more in the U.S. That made it possible for the Windsor firms which weathered the storm to pick up more work when the auto industry recovered.

Financial support from our federal government also helped, says Wiggins, a former banker for the Export Development Canada. “I would attribute the market share shift to the guys in the States not having an Export Canada to help finance and capitalize them.”

But the boom-and-bust cycle of recent years may also be over, he says. The crisis taught the Canadian survivors the danger of being “leveraged” by the OEM automakers, which until the bankruptcy had been stringing them along by not paying their debts for years on end.

“Now they pick which work they want to do, and they don’t get over-leveraged.”

The upcoming work from Detroit and the Japanese automaker which build in North America is gigantic, Wiggins says: GM is relaunching all of its full-size trucks, which is “huge.” Chrysler is launching a new Fiat 500, the 200, a new Journey, and small and large commercial vans. Ford is relaunching the Transit and the Lincoln MKX. Toyota is relaunching the Highlander and the Corolla, Honda the Ridgeline and the Acura TL and MDX. And that’s just for 2013.

The economic importance of Windsor-Essex being so dominant in such a high-tech manufacturing industry shouldn’t be underestimated, in Wiggins’ view.

“Politicians don’t even know what we have here,” Wiggins says, with disdain evident in his voice. “It’s such a jewel of an industry. It’s the best in North America, if not the world. And you never hear about it unless (The Windsor Star) writes about it.”